Bids & RFPs
SECTION 2 PURCHASING POLICIES
The purpose of this section is to establish purchasing guidelines. These policies are applicable to all purchasing for the Town of Frederick and are established to ensure that needed goods and services are obtained in a timely manner, at the lowest prices possible, consistent with acceptable quality standards.
Consistent with these objectives, a part of the Town’s procurement activity is decentralized. In recognition of the cost of staff time and to reduce the cost of making small purchases, purchasing cards are issued to selected personnel as approved by the Finance Director. The purchasing card will be defined later in this manual.
Procedures which apply to purchases made directly by Town staff as well as the steps followed by the Finance Department are described below, along with the public purchasing law and ethical standards that shape the Town’s purchasing activities.
2.1 Governing Laws and Policies
Procurements by the Town of Frederick are governed by state law, and these Purchasing Policies. The Town of Frederick establishes further requirements for the Town’s purchasing activities in separate sections of this policy. The Town’s administrative policies and procedures describe basic procurement processes: e.g., public bidding, bid opening, bid evaluation and bid award.
2.2 Principles and Ethics.
All employees of the Town of Frederick shall uphold and support the following principles and ethics:
We believe in the dignity and worth of the service rendered by government and our own social responsibility as trusted public servants. We consider, first, the interest of the Town in all transactions and agree to carry out the Town’s established Purchasing Policies and applicable law;
We will keep the Town informed, through appropriate channels, on problems and progress of the Town of Frederick that we serve, but keep ourselves in the background, by emphasizing the importance of the facts;
We are governed by the highest ideals of honor and integrity in all public and personal relationships in order that we may merit the respect and inspire the confidence of the Town and the public, which we serve;
We strive to stimulate competitive bidding in order to obtain goods and services at the lowest possible cost, and to provide all interested vendors with the opportunity to offer their products to the Town;
We strive to accord a prompt and courteous reception, so far as conditions will permit, to all who call on a legitimate business mission;
We believe that personal gain or benefit obtained through misuse of public or personal relationships is dishonest.
2.3 Conflict of Interest.
No employee or official of the Town shall participate in a transaction, contract, activity, or service of the Town which has a direct or predictable effect on the employee’s financial interests or the financial interests of an employee’s immediate family member or is otherwise prohibited by law.
2.4 General Purchasing Rules.
All purchases or contracts for services of any kind or description, payment for which is to be made from funds of the Town of Frederick, shall be, without exception, in the following manner.
2.4.1 Personal Purchases. It is prohibited for an employee or official to make purchases for personal purposes or to receive special pricing from a vendor using the Town’s name, account, or reputation. Employees may not authorize payments to themselves. The employee’s Department Head or the Town Administrator must approve the expenditure.
2.4.2 The Finance Department has the responsibility to oversee all purchasing activities for all departments at the Town. Any employee that has a purchasing card approved by their Department Head is authorized to purchase goods as described in the purchasing card policy section.
2.4.3 Purchasing Thresholds/Authority
a. Under $10,000. Small items in this category, used on a day-to-day basis, may be purchased with the approval of supervisory personnel without competitive bidding on each item. However, even on these items, periodic telephone checks should be made to be certain the purchases are secured from a local source at the lowest cost for the quality needed. Items used on a day-to-day basis consist of office supplies and other items that are routinely purchased. Department Heads may authorize employees to purchase budgeted items.
b. $10,000 - $49,999.99. Purchases or contracts for services for the sum of $10,000 to $49,999.99 shall be secured on competitive bid basis. This must be accomplished by securing at least three informal bids, request for proposals or through the formal bid process utilizing advertisement and specifications; whichever is most advantageous to the Town.
c. $50,000 and higher: Any item for services, projects, or equipment in this category shall be purchased through the formal bid process. Formal bids shall be secured by advertisement. Additionally, a random sample of vendors who qualify, or who have indicated an interest in bidding, shall be forwarded a copy of the specifications, when possible, to insure the best competitive bids for the Town.
- Construction contracts up to $50,000 can be approved by department heads if the item is appropriated.
- Any non-appropriated items of $25,000 or greater must go before Town Board and be authorized by motion or resolution. This item will be included in the final budget amendment which is adopted by ordinance before the end of the year.
2.4.4 Vehicle Purchases and Vehicle Repairs. The Department Head and the Finance Department must approve all vehicle purchases and major vehicle repair decisions including if the vehicle should be repaired and what vendor is appropriate to make those repairs.
2.4.5 Emergency Purchases. To meet a public emergency which jeopardizes public health, peace, safety or property, the Town Board may make emergency appropriations.
Furthermore, in case of an emergency which requires immediate purchase of supplies or services and time is of the essence, the Town Administrator shall have the authority to authorize such purchases or secure such services needed without complying with procedures as set out in section 2.4. Examples of emergencies requiring emergency purchase include water line collapse, water system failures, and weather-related damage requiring immediate repair.
A full report of such an emergency purchase shall be made by the Town Administrator to the Town Board no later than the next Town Board meeting.
An emergency purchase is an immediate need of goods or service, which was unable to be anticipated, which time is a crucial factor and would be a disservice to the citizens of the Town of Frederick if not timely made.
2.5 Bid Guidelines
The purpose of this policy is to provide guidance on the process necessary when required to follow the bidding process.
2.5.2 Correspondence with Vendors. All correspondence with vendors should be communicated through the Department Head responsible for overseeing the specific bid unless the bid specifications make it advisable to delegate the authority to others.
2.5.3 Formal Bid Notice. All Formal bid purchases or formal contracts for services shall be advertised as follows:
a. All notices and solicitation of bids shall state the time and place of the bid opening. It is required that the request for bid be published in the newspaper at least 10 days prior to the bid opening, and it will be posted on the Town’s website.
b. Notices and solicitations of bids shall include information that these are sealed bids and that they should be so identified (as bids) on the envelope.
c. Notices and solicitation of bids shall plainly state to whom the sealed bid(s) should be addressed, and should be filed with the Town Clerk.
d. Performance bond(s), in cash or otherwise, or other acceptable financial assurance such as letter of credit shall be requested if in the best interest of the Town in such an amount as may be deemed sufficient to secure the execution of the contract or furnish supplies.
e. The Town of Frederick, Colorado reserves the right to reject any and all bids and waive any informality. The Town of Frederick also reserves the right to select the lowest and/or best bidder as determined by the Town in its sole discretion.
2.5.4 Competitive Buying. Town policy requires quotes or bids to be obtained from as many providers as reasonably possible to insure a competitive marketing atmosphere and advantageous pricing. Bids will be solicited when required by policy and also when it is found to be advantageous to do so. Any qualified provider may respond to a Town request for quote or bid.
Periodically, the Finance Department may check items purchased by other authorized personnel to verify that the Town is obtaining the best prices for the quality of goods purchased. Recommendations will be made as necessary to benefit the Town.
2.5.5 Maintenance Agreements. If the need for a maintenance agreement is anticipated at the time of purchase, the terms of the agreement must be included in the bid specifications.
2.5.6 Steps in Bid Process. The following steps are involved in the bid process:
a. Department Head or appointee and/or the Town Clerk prepares the bid package, sets the bid opening date, prepares the advertisement for call for bids, the bid invitation letter, specifications and list of prospective bidders.
b. Department Head or appointee holds public bid opening.
c. The requesting department prepares a tabulation of bids received, analyzes bids, and returns bid documents with recommendations for bid award.
d. Department head prepares final recommendation for submission to Town Administrator or Town Board.
f. Requesting department notifies the Finance Department prior to issuing a Notice to Proceed or otherwise obligating the Town financially, and administers the contract and notifies accounts payable when payment is to be made.
2.5.7 Contractor Performance Problems. It is very important that Departments document any performance problems with a particular vendor. Documentation should include written notification to the vendor of a problem, evidence of attempts to resolve the problem and a summary of the final outcome of the situation.
Please notify the Town Administrator when a vendor continues to have performance problems and forward a report documenting the incident(s). The Town Administrator may determine if a vendor is classed as irresponsible and should not be considered in future bids until the vendor can prove the problems have been corrected.
2.6 Exclusive Service
In the event that there is only one firm or company or individual capable of providing a particular service or commodity, referred to as a sole source vendor, and such services or commodities cannot be secured from any other person(s) or company(ies), then the Town Administrator may authorize securing such items without the above bidding process(es) by declaring a sole source vendor and should be reported to the Board of Trustees. Approval of the Town Administrator must be received prior to making the purchase. To receive such authorization, the Department Head must submit a detailed report explaining why this is the only feasible person/company from which to purchase/contract; and confirmed research must be included in the explanation.
2.7 Exemptions from the Public Bidding Process
The Town recognizes certain exemptions from the Public Bid Process, as described herein.
2.7.1 Professional Services. This Purchasing Policy shall not apply to professional services and the requirements shall not be mandatory in the employment of professional services. Professional services include, but are not limited to, the following: Attorneys, Bond Counsel, Certified Public Accountants/Auditors, Consultants, Engineers, Financial Advisors, Physicians, and Real Estate Brokers.
2.7.2 Design-build Services. This Purchasing Policy shall not apply to design-build specialty services so long as the Town Board approves such an exemption through formal action.
2.7.3 Use of State Bids Awards. This Purchasing Policy shall not apply if the purchasing department is able to piggy-back on a State Bid Award, GSA bid award, or other bid award where a Public Bid Process has taken place.
2.8 Contract Authority
The Town Administrator or department head shall have the power and duty to approve and execute, by signature, all contracts or agreements of, or on behalf of, the Town or its enterprises, subject to the following limitations:
2.8.1 No contract or agreement shall exceed $50,000. Contracts or agreement exceeding $50,000 shall be taken to Town Board for approval.
2.8.2 No contract or agreement shall involve conveyances of interest in land, bonds, indentures, evidence of indebtedness, or proclamations, unless the authority to approve and execute such documents shall be granted by the Town Board.
2.8.3 Such contract or agreement does not constitute an “intergovernmental agreement” under Colorado law.
2.8.4 The Town Administrator may delegate the Town Administrator’s signatory authority for the approval and execution of contracts and agreements to the Finance Director and/or Department Heads where the contractual matters fall within their area of responsibility. With the Town Administrator’s prior approval, Department Heads may further delegate signatory authority for limited purposes.
2.8.5 No Town contract shall be approved or executed unless funds for the payment of obligations under the contract or agreement are in the budget approved by Town Board and the funds have been appropriated by the Town Board. This section shall not prohibit approval and execution of multi-year contracts or agreements where such agreements are legally permissible.
2.8.6 All contracts or agreements exceeding $10,000 are subject to legal review.